The account indicates a bank ledger that read like a sanctions list. In February 2015, files worked through by 140 reporters with the International Consortium of Investigative Journalists showed HSBC’s Swiss private bank had served criminals, corrupt businessmen, politicians and celebrities from across the world, with coverage led by Sueddeutsche Zeitung, Le Monde and the Guardian. The data came from Herve Falciani, a onetime HSBC Switzerland IT employee who, according to the bank, walked out with account and client details in late 2006 and early 2007; he calls himself a whistleblower helping governments trace hidden money and faces Swiss charges of industrial espionage and violating bank secrecy. The published files were a version of a set held by Paris and shared with other governments, Argentina included, from 2010.
The regional roll-call was the detail that traveled furthest. Current and former politicians from Britain, Russia, India and several African countries held accounts. US-sanctioned names appeared, among them Turkish businessman Selim Alguadis and Gennady Timchenko, sanctioned over Ukraine and an associate of President Putin. Egypt’s former trade minister Rachid Mohamed Rachid, who left Cairo as the 2011 uprising against Hosni Mubarak unfolded, was listed with power of attorney over a $31 million account. So did Rami Makhlouf, the Syrian president’s cousin, and Frantz Merceron, tied to Haiti’s former leader Jean-Claude “Baby Doc” Duvalier. The ICIJ’s summary was unsparing: “HSBC profited from doing business with arms dealers who channeled mortar bombs to child soldiers in Africa, bag men for Third World dictators, traffickers in blood diamonds and other international outlaws,” it reported.
HSBC’s answer was confession plus architecture. “We acknowledge and are accountable for past compliance and control failures.” The bank argued that the Swiss arm, bought in 1999, was never fully folded into the group, which let “significantly lower” standards of compliance and due diligence persist.
The numbers behind the politics: Falciani passed 100,000 HSBC client accounts to the French authorities in 2008, covering assets worth £78 billion. France has recovered £188 million in taxes and fines, Spain £220 million; Britain, since 2010, had recovered just £135 million from the leak. HMRC received files on roughly 1,000 Britons suspected of using the Swiss subsidiary to dodge tax, yet only one person was ever prosecuted, and the tax office never passed the documents to the Financial Conduct Authority, citing an “international treaty agreement” with France.
Officials said little, and the public noticed. Labour demanded the government “explain” what it knew and branded the Treasury a light touch; a YouGov poll for the Times put 62% behind calls for the chancellor to answer questions. George Osborne, at a Tate Gallery appearance on the economy, disagreed: “I don’t think it would be right for a chancellor of the exchequer to direct prosecutions against individuals or individual companies,” adding, “We resourced HMRC accordingly and as a result prosecutions are up fivefold.”
Geneva was less reticent. Police raided the bank’s Swiss offices that Wednesday, and the local prosecution office confirmed it was investigating “HSBC Private Bank (Suisse) SA and persons unknown for suspected aggravated money laundering”. HSBC said it had “cooperated continuously with the Swiss authorities since first becoming aware of the data theft in 2008”. The widest claim came from Buenos Aires: in November 2014, Argentina’s revenue service charged the bank with aiding over 4,000 Argentines in evading roughly $3 billion of tax. Measured against one British prosecution, that gap was the story.
